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The allegation carries significant weight: that Rachel Reeves has deceived UK citizens, frightening them into accepting massive extra taxes which would be spent on increased welfare payments. While hyperbolic, this is not usual political bickering; this time, the consequences are higher. Just last week, critics of Reeves alongside Keir Starmer had been labeling their budget "chaotic". Now, it's branded as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

Such a grave charge demands straightforward responses, therefore let me provide my assessment. Did the chancellor tell lies? Based on the available information, no. There were no whoppers. But, notwithstanding Starmer's recent remarks, it doesn't follow that there is nothing to see and we can all move along. Reeves did misinform the public about the factors informing her decisions. Was it to funnel cash to "benefits street", like the Tories claim? Certainly not, as the figures demonstrate it.

A Reputation Sustains A Further Hit, Yet Truth Should Prevail

Reeves has sustained another hit to her standing, but, should facts still have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, over the leak of its own documents will satisfy SW1's appetite for scandal.

But the true narrative is much more unusual compared to the headlines suggest, and stretches broader and deeper beyond the political futures of Starmer and his class of '24. At its heart, this is an account about what degree of influence the public get in the running of the nation. And it should worry you.

First, to Brass Tacks

When the OBR released recently a portion of the projections it shared with Reeves while she prepared the budget, the shock was immediate. Not merely has the OBR not acted this way before (described as an "exceptional move"), its figures apparently contradicted the chancellor's words. Even as leaks from Westminster were about how bleak the budget was going to be, the OBR's own forecasts were getting better.

Consider the Treasury's most "iron-clad" fiscal rule, stating by 2030 daily spending on hospitals, schools, and other services would be completely funded by taxes: at the end of October, the OBR calculated it would barely be met, albeit by a minuscule margin.

A few days later, Reeves held a press conference so unprecedented it forced morning television to interrupt its usual fare. Weeks prior to the real budget, the nation was warned: taxes would rise, with the primary cause cited as gloomy numbers provided by the OBR, specifically its conclusion that the UK had become less productive, putting more in but yielding less.

And so! It came to pass. Despite the implications from Telegraph editorials and Tory media appearances implied over the weekend, this is essentially what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Justification

The way in which Reeves misled us concerned her justification, because those OBR forecasts didn't force her hand. She could have made different options; she could have provided alternative explanations, even on budget day itself. Before the recent election, Starmer pledged exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it is powerlessness that jumps out from Reeves's breakfast speech. The first Labour chancellor in 15 years portrays herself to be a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any party would be in this position today, facing the choices that I face."

She certainly make decisions, just not one Labour cares to publicize. From April 2029 British workers and businesses are set to be contributing another £26bn a year in tax – and the majority of this will not be funding better hospitals, new libraries, nor enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Instead of going on services, over 50% of this additional revenue will instead give Reeves a buffer for her own budgetary constraints. About 25% is allocated to covering the administration's U-turns. Reviewing the OBR's calculations and being as generous as possible towards a Labour chancellor, only 17% of the taxes will go on genuinely additional spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it was always an act of political theatre by George Osborne. This administration should have have binned it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform along with all of Blue Pravda have been railing against the idea that Reeves conforms to the stereotype of Labour chancellors, soaking hard workers to spend on shirkers. Party MPs have been cheering her budget for being balm to their social concerns, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was largely targeted towards asset managers, speculative capital and participants within the bond markets.

Downing Street can make a strong case in its defence. The margins provided by the OBR were insufficient for comfort, especially given that bond investors demand from the UK the greatest borrowing cost among G7 rich countries – higher than France, which lost a prime minister, higher than Japan which has way more debt. Coupled with our policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves argue this budget allows the Bank of England to cut interest rates.

It's understandable that those folk with red rosettes may choose not to frame it this way when they visit #Labourdoorstep. As a consultant to Downing Street says, Reeves has "utilised" the bond market to act as a tool of discipline against Labour MPs and the voters. It's the reason the chancellor cannot resign, no matter what promises are broken. It is also why Labour MPs must fall into line and support measures that cut billions from social security, just as Starmer indicated recently.

A Lack of Statecraft , an Unfulfilled Promise

What is absent from this is any sense of statecraft, of harnessing the Treasury and the central bank to forge a fresh understanding with markets. Missing too is innate understanding of voters,